MortgagesApr 13 2022

‘World we now live in’: Brokers bemoan 11pm case submissions

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‘World we now live in’: Brokers bemoan 11pm case submissions
Photo by Daniel Putzer: Pexels

On 11 April, Barclays emailed brokers just before 1pm informing them of 21 rate increases on its residential and remortgage ranges set to come into force by midnight that day.

Brokers sent screenshots to FTAdviser showing messages on Barclays’ broker portal saying ‘there is no online booking available at this time’ the day the changes were made. 

These messages led some brokers to think they had missed out on locking in rates for their clients. The bank has since said its daily limit for applications means some brokers would have had to book their case and submit it the following day.

Barclays emailed brokers today (April 13) telling them it has also pulled a selection of its two-year and five-year fixed rate products with immediate effect - without warning - due to “experiencing high demand”.

Though a spokesperson said: "In the event that the requested mortgage rate is withdrawn, the broker is able to continue to apply for the rate the following day, as we allow a further nine days’ grace period for a broker to submit an application on a withdrawn product, again ensuring their clients aren’t disadvantaged."

I can’t think of a broker that hasn’t had to submit an application at 11 o’clock at night.Chris Sykes

This is not, according to brokers, an unusual occurrence.

In recent months many other lenders have sent rate change and product withdrawal warnings to brokers just hours in advance, or issued no warning at all.

Natwest have sent two after 2pm in the past month. Nationwide sent one after 3pm on the same day as Barclays. And today, Clydesdale Bank sent brokers changes at 3pm with a deadline of 8pm.

“It is very short notice,” said Chris Sykes, “but that’s the world us brokers have been living in the past few months. I can’t think of a broker that hasn’t had to submit an application at 11 o’clock at night. It’s a tough time.”

Sykes said a lot of brokers simply “don’t have much of a work-life balance”. He explained: “There are a lot of brokers which make their own hours and aren’t just 9-5 or 7-7. Because it’s a job where you’re likely self-employed or commission-based, a lot of brokers work 50-60 hour weeks. If we want the business and to save clients money, we do it.”

In one instance, Sykes saved his clients £5,500 by filing a case late in the evening. At the time, one of them was giving birth while the other was rushing to gather the relevant papers to help him get the application in.

Sykes said he understood why lenders had to increase their rates in order to remain competitive, but the small windows often provided meant some brokers will inevitably miss the deadline for their clients.

Since the back-end of last year when rates turned around, rate increases have seemed ever-present.David Hollingworth

The recent rate increases among lenders follow a series of Bank of England base rate rises, jumping from 0.1 per cent to 0.75 per cent since the end of last year.

With lenders trying to remain competitive against the backdrop of these rises, multiple changes are being favoured over bigger step changes.

David Hollingworth, associate director at L&C Mortgages, said the number of changes introduced by lenders had been “substantial” in recent months, and “comes very rapidly”.

He explained: “Lenders will change almost on a weekly basis now. When you look at that across the whole market for brokers, it can mean 10 changes in a day from different lenders.”

While lenders were changing rates a lot last year too, Hollingworth said this was when rates were going down so it wasn’t as imperative for clients. 

“Rates have more than doubled on two and five-year fixes since October, going from 1 to 2 per cent or more,” he said.

“We’d love more notice from lenders and it is very challenging to meet these changes. Since the back-end of last year when rates turned around, rate increases have seemed ever-present.”

‘Advisers’ reputations are at stake'’

For some brokers, the short notice changes leave them feeling frustrated, both because of the stress they can put the client through, and also because of the negative impact it can have on their reputation as professionals.

Imran Hussain, a director at Harmony Financial Services, said: “If a deal is about to be pulled, it can cause intensified stress on our clients. While advisers can take this stress on the chin as part and parcel of the industry, this is a detriment to the client, who is under pressure to make a decision. 

Lenders aren’t helping the reputation of the industry.Imran Hussain

“They may want time to read through the documents, ask us questions, and speak to family members before making a decision.”

And with deals disappearing, Hussain said the only reputation “getting ruined” was the adviser’s, not the lender’s.

“Lenders aren’t helping the reputation of the industry,” said Hussain. “If a client is new to the mortgage market, these deals seem to chop and change all the time. It makes us out to be a bunch of jokers.”

Hussain said “there’s nothing more frustrating” than products being pulled in such a short space of being launched by lenders. He called on lenders to price mortgages right the first time around.

“Lenders should be factoring the Bank of England base rates in. They need to set their stall out and get it right the first time, just as they expect advisers to submit an application with all the correct information the first time round.”

Hussain reckons one business day is not a lot to ask for as a warning for brokers and “should be the minimum”, though he added 72 hours would be better and ensure no-one’s mental health is affected.

Case managers should be able to stop working at 5pm and spend time with their family.Chris Barker

Chris Barker, managing director of Manchester Money, agreed with Hussain that it is the client which is most affected by these quick changes, and that it is the reputation of the broker, not the lender, which “gets tarnished” for recommending that product.

One adviser at Barker’s firm submitted 21 applications in a day this week due to lenders changing rates and withdrawing products.

“He had to work flat out all day and night,” said Barker. “It’s really unfair, it’s got to be a two-way street if lenders expect us to support them. Case managers should be able to stop working at 5pm and spend time with their family.”

Barker said even 24 hours is more workable, versus an afternoon email which requires brokers to get the case in before the day is out.

Though he did acknowledge that some lenders, such as Coventry Building Society, tend to give brokers 48-hour warning notices.

ruby.hinchliffe@ft.com